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THE DOW IS DOWN 750 POINTS IN FOUR DAYS.
Negative reports of lower than expected retail consumer spending and trouble at J.P. Morgan, influenced the market on the downside today. The Fed Beige Book came out today and indicated that the Fed is concerned about slowing consumer spending. So am I! The 10 year treasury bond, which is an indication of inflation, close at 1.82%down from 2% last month. indicating investors concern about the US economy. On the positive side, oil closed up and $48.43 a barrel, up 5.6%, the largest one-day increase since June 2012. After all, a rally was overdue and probably has nothing to do with the economy. However, copper hit a 5 year low making deflation an on going threat! As expected and predicted, the market has become more volatile as the VIX is up 8% today and up 27% in three days. Concerns about Russia increased today as they announce that they are going to use their $88 billion in Sovereign Wealth Fund to help hold up the Russian ruble. Good Luck!

EDUCATION – YES

A RECENT ARTICLE IN OUR LOCAL VAIL CO NEWSPAPER GOT THIS RESPONSE FROM ME In an article dated January 13, Morgan Liddick indicated the US cannot afford to help students with tuition for a community college education. ’ Yes we can!’ Year-end forecasts indicate that the budget deficit has come down from over 10% of GDP, to about -3% in 2014 and should be balanced or show a small surplus by 2016. (Remember, the last time we had a budget surplus, a Clinton was President.) The US deficits are going away, because we no longer have to pay for Bush’s two wars and the mistakes and costs of Bush’s Great Recession.

We cannot afford to not educate our populace. We think of the US as number one. However, the latest Social Progress Index shows the US ranks 16th overall, but 39th in basic education. At election time, every politician calls for education as their number one priority, because that’s what “we the people” want. A recent Princeton study shows that public opinion has no effect on the outcome of an issue in Congress, whether it is 0% approval or 100% approval, the line of accomplishment is flat lined. That’s why Congress has a 7% approval rating. Since Citizens United, that declared corporations are people, all changes in government are dictated by donors and election contributions (BIG MONEY). Donor power has taken over the rights of “we the people.” Unless we better educate our people, the US will sink below its 16th ratting and the current trend of all income growth going to only the corporations and the top 1%, will continue.

You claim that helping students attend community colleges will  be “yet another transfer of wealth from the despised productive classes to the legions of wide-eyed credulous Obamaniacs.”Are you talking about ‘Class Warfare?” ‘We the people,’ have already lost that battle, with the top 1% getting all the growth in income and holding 70% of the nation’s wealth and in the world only 80 people control 50% of the world’s wealth. Educations will help level the playing field. I am sure you have no objection of spending over $700 billion for the defense budget, which will not protect us against a Paris type event. How about some spending on education? It’s time to fulfill the pledges of both Democratic and Republican politicians and to make education the nation’s number one priority.

LONE BEAR

After reading all the year in periodical, I realize that I am one of the few people who are not bullish on the US stock market. In September 1981 I called myself The LONE BULL and predicted that markets would go from 1000 to above 10,000. Now, I may have to call myself The LONE BEAR as I see the markets vulnerable back down to the 12,000-10,750… It certainly isn’t as much fun being bearish, as it was being bullish. Let’s face it, a Bear Market will only help those market traders who can go short. Everyone else including my family and friends will suffer. Sorry, I just can’t go along with all the hype and year-end cheer. I continue to be worried about 1) the health of the consumer based US economy, when all of the growth is going to the top 1%. 2) the vulnerability of the high-yield bond market and 3) the balance sheets of the banks, if there is a bond crisis and now 4)the effect of increased terrorist attacks on Western economies. I hope I’m wrong, but I just have to speak out when I see troubles ahead. So, in my opinion get ready for a volatile 2015. Happy new year!

 Current 20014 Dow NASDAQ S&P 500
17,427 4,639 2,011
Short Term Down Down Down
Int. Term ? ? ?
Long Term UP UP UP
ForecastedTrend  DJIA NASDAQ S&P 500
Short Term Down Down Down
Int. Term ? ? ?
Long Term Sideways? Sideways? Sideways?
Breakout Points DJIA NASDAQ S&P 500
Short Term Up (Resistance) 18,086 4,814 2,092
Short Term Down (Support) 17,068/

15,855            

4547

/4,166

1,972

/1,820

Int. Term Up (Resistance) 18,062 See Fibonacci Projections above 5,002 See Fibonacci Projections above 2,486 See Fibonacci Projections above
Int. Term Down (Support) 15,356

/14,688

3,986

/3294

1,560
Long Term Up (Resistance) 18,974 5,132 3,044
Long Term Down Fibonacci Support 50%12,00062% 10,750       50%2,958  62% 2,555 50%1,390 62% 1,177
       

CARL BIRKELBACH 1/14/15

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